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Canadian economy sheds 28,900 jobs

The Canadian economy unexpectedly lost 28,900 net jobs in April, fewer people looked for work, and the unemployment rate remained stuck at 6.9 per cent, Statistics Canada said Friday.

Economists had anticipated an increase of at least 12,000 jobs for April, according to Thomson Reuters. Instead, April saw the biggest decline since December 2013, when the economy shed 44,000 jobs.

StatsCans monthly jobs numbers come at a time when the Conservative government is under sustained fire over alleged abuses of its temporary foreign workers program, which was created to fill labour shortages in certain sectors. (Shutterstock Illustration)

The disappointing data comes amid growing concerns about the lack of reliable information about Canada’s labour market along with allegations some employers are abusing Ottawa’s controversial temporary foreign worker program.

Earlier this week, the federal Auditor General was critical of another Statscan employment-related survey, saying it doesn’t provide enough information on where and what kind of jobs are vacant.

The monthly data in Statistics Canada’s Labour Force Survey is so volatile as to be almost meaningless, many private sector economists have complained.

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“I would say our labour statistics are not as good as they should be,” said CIBC deputy chief economist Benjamin Tal. “The sample is not big enough. It’s extremely volatile and you get a lot of noise. In one month you gain 50,000 jobs. The month after, you lose 50,000.”

Most economists say it takes at least three months of data to establish a trend. The longer-range view in Friday’s job creation report wasn’t encouraging.

Overall employment growth has been stalled since August 2013, and is up less than 1 per cent since a year ago, according to Statistics Canada.

Since last year, the Canadian economy has created just 149,000 jobs, with only half in the desirable full-time category and the rest in part-time work.

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“Just when we thought it was safe to go back … Canadian employment fell by 28,900 in April, the third decline in five months and mostly reversing the hefty 42,900 jump the prior month,” BMO Capital Markets chief economist Doug Porter wrote in a note to clients.

The jobs report “suggests that the economy remained stuck in the slow lane last quarter, hampered by an underperforming export sector and a housing slowdown,” David Madani, economist with Capital Economics, wrote in a note to clients.

The unemployment rate held steady mainly because fewer people looked for work, even in the 15 to 24 year old age group, a trend that worries economists and policy makers.

Youth employment across Canada fell by 27,100 while the jobless rate for the 15 to 24 year old age group held steady at 13.4 per cent, the agency reported.

The Labour Force Survey comes just days after the auditor-general was critical of a separate but related labour market report, called the survey of employment, payrolls and hours.

The survey of employers is too vague to be of much use to policy makers, researchers and other users, Auditor General Michael Ferguson said in his spring report released Tuesday.

The survey doesn’t disclose the precise location of job vacancies within a province or the actual jobs within a broad industry classification, he said.

“For example, reported job vacancies in Alberta could be in Fort McMurray, Grande Prairie, Medicine Hat, or any other community in the province,” says the report.

“We found that Statistics Canada needs to better understand and address the needs of users outside the federal government, in particular the need for data on small geographic areas and subpopulations,” Ferguson said Tuesday.

The federal Conservatives have been under fire over alleged abuses of its temporary foreign workers program, which is supposed to fill labour shortages.

Ottawa also plans to spend $900 million on the Canada Job Grant, a cost-shared program with the provinces and employers, that it says is desperately needed to close the skills gap.

Most of April’s job losses— 30,900 — were full-time, while most of the job gains – 2,000 – were in the less desirable part-time category,

according to Statistics Canada.

Quebec had the biggest job losses, followed by New Brunswick, Newfoundland and Labrador and Prince Edward Island.

Ontario was a bright spot, gaining 17,800 net new jobs, all of them full-time. Employment in the province is up 1.1 per cent since a year ago.

Among industries, the biggest loser was accommodation and food services, with 32,200 fewer jobs, while finance, insurance, real estate and leasing lost 19,400 jobs. Jobs increased in business, building and other support services, by 26,100, the report showed.

The data may also have been distorted by the timing of Easter. The report is based on a household survey, which was conducted the week that included Good Friday.

“We see it as possible that some would choose to not have employees start in a holiday shortened week,” CIBC chief economist Avery Shenfeld wrote in a note to clients.

Statistics Canada said the only impact of Easter was on number of hours worked, which was lower that week, likely due to more people taking time off for the holiday.

Economist Don Drummond said the job-vacancy survey needs to be based on a larger sample and provide more practical information.

“Certainly, if I was unemployed, I would rather know where there’s a job vacancy than how many other people are unemployed along with me,” Drummond said.

The Canadian Labour Congress said Ottawa should boost Statistics Canada’s funding so that it can provide better data to voters.

“I think it’s very important for the public to have the right information and to see who’s telling them the truth,” said the labour group’s senior economist Angella MacEwen.

The labour force survey, for example, should include how many people are underemployed, she said.

Statistics Canada has had its funding cut by $29.3-million over the last two years.

Federal Employment Minister Jason Kenney’s office said in an email he is looking forward to meeting with his provincial and territorial counterparts this summer and discussing better labour market data.

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